TELENOR GROUP FIRST QUARTER Sigve Brekke, CEO

Transcription

1 TELENOR GROUP FIRST QUARTER Sigve Brekke, CEO

2 DISCLAIMER The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ( relevant persons ). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation contains statements regarding the future in connection with the Telenor Group s growth initiatives, profit figures, outlook, strategies and objectives. In particular, the slide Outlook for 2016 contains forward-looking statements regarding the Telenor Group s expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Telenor Group. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. 2

3 HIGHLIGHTS Q A SOLID START TO THE YEAR 5.4 million new mobile subscribers 6% organic growth in mobile subscription and traffic revenues 5% organic EBITDA growth Operating cash flow of NOK 6.1 billion 3

4 REVENUE GROWTH IN NORWAY IMPACTED BY LOWER HANDSET SALES AND DECLINING FIXED LEGACY REVENUES MOBILE 1% organic growth in mobile subscription and traffic revenues Lower handset sales volumes New tariffs launched - includes EU roaming FIXED 6% revenue decline, primarily driven by telephony, ADSL and wholesale 12k new high-speed internet subscribers, compensating for ADSL decline Mobile ARPU (NOK) Domestic Roaming Interconnect Revenues (NOK m) Mobile Fixed % Organic growth assuming fixed currency, adjusted for acquisitions and 4 Organic revenue growth disposals. EBITDA margin before other items.

5 SOLID PROFITABILITY IN NORWAY, PROGRESS ON LONG TERM EFFICIENCY INITIATIVES 44% EBITDA MARGIN Mobile gross profit stable despite lower roaming and wholesale contribution Opex impacted by lower commissions and operation & maintenance costs LONG TERM EFFICIENCY INITIATIVES Reduce complexity of products, processes and IT systems Scope extended to include cable operation Net positive effect from 2017 EBITDA development YoY (NOK m) Long term efficiency programme (NOK m) Opex savings ~900 Project cost (200) (350) (380) Q1 15 Gross profit Opex Q EBITDA margin before other items.

6 CONTINUED GROWTH IN CONSUMER MOBILE IN SWEDEN MOBILE 2% organic growth in mobile subscription and traffic revenues driven by consumer 3k net subscriber growth Total mobile revenues impacted by handset sales FIXED 11k new high-speed internet subscribers Aiming to cover 500k new single dwelling households by 2020 Mobile organic subscription & traffic revenue growth Revenues (NOK m) and EBITDA margin (%) 1.6 % 2.5 % 2.1 % 1.7 % % -0.1 % 0.2 % 25% 29% 28% 32% 28% 29% Organic growth assuming fixed currency, adjusted for acquisitions and 6 Organic revenue growth disposals. EBITDA margin before other items.

7 CONTINUATION OF TRENDS IN OTHER EUROPEAN MARKETS DENMARK Continued intense competition Launch of new business support system HUNGARY Solid trends in postpaid consumer segment, offset by pressure in prepaid and SME MONTENEGRO AND SERBIA 6% organic ARPU growth from increased IC revenues and higher postpaid share BULGARIA Cost control supporting EBITDA margin Revenues (NOK m) and EBITDA margin (%) Denmark Hungary % -6% 17% 13% 32% 32% Q1 15 Q1 16 Q1 15 Q1 16 MNE & Serbia Bulgaria % 1% 33% 31% Q1 15 Q % 38% Q1 15 Q1 16 Organic growth assuming fixed currency, adjusted for acquisitions and 7 Organic revenue growth disposals. EBITDA margin before other items.

8 SUBSCRIBER GROWTH AMIDST INTENSE COMPETITION IN THAILAND 225k net subscriber growth 2% organic decline in subscription and traffic revenues EBITDA margin improvement from lower device subsidies 3G population coverage at 94%, 4G now in all 77 provinces Solid spectrum portfolio until concession expiry in September 2018 Revenues (NOK m) and EBITDA margin (%) % 27% 32% 31% 36% 29% 34% 8 Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic revenue growth

9 SOLID POSTPAID PERFORMANCE IN MALAYSIA Postpaid subscribers ( 000) 221k net subscriber growth and maintained market share in highly competitive market % organic decline in subscription and traffic revenues 7% organic growth in postpaid service revenues and stable postpaid ARPU* Revenues (NOK m) and EBITDA margin (%) 3G/4G population coverage at 88%/73% EBITDA continues to be impacted by margin pressure on international traffic 45% 44% 45% 44% -8% 40% 42% 9 Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. *) Service revenues according to local definition. Organic revenue growth

10 STRONG PERFORMANCE IN BANGLADESH AND PAKISTAN BANGLADESH (GRAMEENPHONE) 12% organic subscription and traffic revenue growth 55% EBITDA margin SIM re-registration >50% completed PAKISTAN 2.2 million net subscriber growth 2% organic subscription and traffic revenue growth 40% EBITDA margin Revenues (NOK m) and EBITDA margin (%) Revenues (NOK m) and EBITDA margin (%) % % 50% 54% 54% 51% 55% 55% 31% 42% 32% 46% 43% 40% 10 Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic revenue growth

11 FIRST QUARTER WITH POSITIVE OPERATING CASH FLOW IN MYANMAR CONTINUED SUBSCRIBER GROWTH 1.8 million net subscriber growth 52% active data users SIM market share estimated at 38% STRONG FINANCIAL PERFORMANCE 42% EBITDA margin 10% operating cash flow margin NETWORK ROLLOUT ACCORDING TO PLAN 5,000 network sites on air 62% population coverage Aiming for around 9,000 sites Revenues (NOK m) and EBITDA margin % 48% 20% 43% 42% Subscribers (m) Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items.

12 CONTINUED SUBSCRIBER AND REVENUE GROWTH IN INDIA 1.5 million subscriber growth (+15% YoY) Revenues (NOK m) Total subscriber base of 44 million % ARPU remains under pressure, with 8% decline YoY 9% organic growth in subscription and traffic revenues EBITDA (NOK m) Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic revenue growth

13 CAPITAL MARKETS DAY Date: 22 September 2016 Venue: London SAVE THE DATE 13

14 TELENOR GROUP FIRST QUARTER Morten Karlsen Sørby, Acting CFO

15 FINANCIAL HIGHLIGHTS 6% organic growth in mobile subscription & traffic revenues 35% EBITDA margin and 5% organic growth in EBITDA Operating cash flow of NOK 6.1 billion YTD Organic revenue growth 1.5% EBITDA margin 35.4% Capex / sales 16.8% Outlook for 2016 maintained Revenues (NOK bn) EBITDA (NOK bn) Q1 15 Q1 16 Q1 15 Q Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA before other items. Capex excl. spectrum and licence fees.

16 ORGANIC REVENUE GROWTH SOFTENED BY LOWER HANDSET SALES Revenues (NOK m) Organic revenue growth (%) % 5.4 % 5.1 % 7.3 % 5.6 % 5.7 % 5.5 % 4.5 % 5.7 % 5.8 % Total revenues Mobile subscription & traffic revenues 2.3 % 1.5 % 16 Organic growth assuming fixed currency, adjusted for acquisitions and disposals.

17 35% EBITDA MARGIN AND 5% ORGANIC EBITDA GROWTH EBITDA (NOK m) and EBITDA margin EBITDA change YoY (NOK m) % 34% 34% 37% 32% 35% Q1 15 Myanmar GP Broadcast Digi Others Q EBITDA and EBITDA margin before other items

18 CAPEX OF NOK 5.5 BILLION Capex (NOK m) and capex/sales Capex distribution Thailand 20 % Other 11 % Pakistan 6 % Sweden 6 % 19% 15% 21% 18% 20% 17% Bangladesh 18 % Malaysia 6 % India 7 % Norway 16 % Myanmar 10 % 18 Capex and capex/sales ratio excl. licences

19 OPERATING CASH FLOW OF NOK 6.1 BILLION OCF (NOK m) and OCF margin OCF reconciliation (NOK bn) % 19% 19% 12% 13% 13% Q1 15 Gross profit Opex Capex Q Operating cash flow = EBITDA before other items capex excl. licences

20 SIGNIFICANT ONE-TIME ITEMS IN THE QUARTER Issue Account P&L effect (NOK m) Write-down of non-current receivables in India Other items -611 Impairment write-down India Impairment -2,302 Reversal of write-down of VimpelCom stake Associated companies +4,398 Impairment write-down in connection with sale of Amedia stake Partial repayment of net investment in Denmark and recycling of related OCI effects Associated companies -363 Financial items

21 NORMALISED NET INCOME OF NOK 3.6 BILLION NOK m Q1 16 Q1 15 Revenues EBITDA before other items Other items EBITDA Depreciation and amortisation Impairment losses EBIT Associated companies Net financials Profit before taxes Taxes Non-controlling interests Net income to Telenor EPS (NOK) Broadcast (+211m) India (-611m), Norway (-77m), dtac (-37m) India (-2,302m), Broadcast (-128m) VimpelCom (4 582m) Amedia (-363m) Online classifieds (-46m) Telenor ASA (-577m) 21

22 NET DEBT OF NOK 53.6 BN AND NET DEBT/EBITDA OF 1.2X Net debt (NOK bn) and net debt/ebitda * Change in net debt (NOK bn) Net debt 31 Dec EBITDA (11.0) Income taxes paid 1.3 Net interest paid 0.5 Capex paid 6.2 Investments in Tapad 2.7 Divi. paid and minority share purchase 0.7 Net revenue share dtac (0.4) Currency effects (1.6) Licence obligations paid in Myanmar 1.1 Net change during Q116 (0.5) Net debt 31 Mar *) 12 months rolling EBITDA. Net debt excl. licence commitments of NOK 3.6 bn

23 OUTLOOK FOR 2016 MAINTAINED 2016 YTD Organic revenue growth 2-4% 1.5% EBITDA margin 33-34% 35.4% Capex/sales ratio 17-19% 16.8% Organic revenue growth in fixed currency, adj. for acquisitions and disposals. EBITDA before other items. Capex excl. licence fees. 23

24 HIGHLIGHTS Q A SOLID START TO THE YEAR 5.4 million new mobile subscribers 6% organic growth in mobile subscription and traffic revenues 5% organic EBITDA growth Operating cash flow of NOK 6.1 billion 24

25 TELENOR GROUP FIRST QUARTER Q&A

26 TELENOR GROUP FIRST QUARTER APPENDIX

27 TELENOR GROUP 208 million consolidated mobile subscribers Revenues in 2015: NOK 128 bn (USD 14 bn) Market cap: NOK 202 bn (USD 22 bn) 27

28 GEOGRAPHIC SPLIT OF KEY FINANCIALS 2015 REVENUES EBITDA OPERATING CASH FLOW 8% 21% -1% 28% 29% 52% 19% 55% 18% 53% 23% Norway Europe Asia Other Norway Europe Asia Other Norway Europe Asia Other 28 Capex and capex/sales ratio excl. licences

29 PRIORITIES FOR CAPITAL ALLOCATION 1 Maintain a solid balance sheet Net debt/ebitda below 2.0x 2 Competitive shareholder remuneration 50-80% dividend payout of normalised net income Aim for YoY growth in dividends 3 Disciplined and selective M&A Value driven, within core assets and regions 29

30 NORWAY Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 41% 42% 41% 45% 39% 44% Mobile ARPU (NOK/month) EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

31 SWEDEN Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 25% 29% 28% 32% 28% 29% Mobile ARPU (SEK/month) EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

32 DANMARK From 31 March 2016, pay-as-you-go cards will no longer be part of Telenor Denmark s product offering. Subscription and ARPU figures have been updated retrospectively. Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 13% 17% 10% 10% 10% 13% Mobile ARPU (DKK/month) EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

33 BROADCAST DTH subscribers ( 000) Revenues (NOK m) and EBITDA margin % 30% 30% 32% 37% 32% 42% DTH ARPU (NOK/month) EBITDA EBITDA and capex (NOK m) CAPEX % % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Capex excl. licence fees Organic growth

34 HUNGARY Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 24% 32% 31% 36% 24% 32% Mobile ARPU (HUF/month) EBITDA and capex (NOK m) EBITDA CAPEX 417-6% % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

35 MONTENEGRO AND SERBIA Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 32% 33% 35% 38% 32% 31% Mobile ARPU (EUR/month) EBITDA and capex (NOK m) EBITDA CAPEX 404 6% % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

36 BULGARIA Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 34% 37% 40% 41% 36% 38% Mobile ARPU (BGN/month) EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

37 THAILAND (DTAC) Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 27% 32% 31% 36% 29% 34% Mobile ARPU (THB/month) EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

38 MALAYSIA (DIGI) Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 45% 44% 45% 44% 40% 42% Mobile ARPU (MYR/month) EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

39 BANGLADESH (GRAMEENPHONE) Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 50% 54% 54% 51% 55% 55% Mobile ARPU (BDT/month) EBITDA and capex (NOK m) % EBITDA CAPEX % 39 Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

40 PAKISTAN Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 31% 42% 32% 46% 43% 40% Mobile ARPU (PKR/month) EBITDA and capex (NOK m) EBITDA CAPEX % % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

41 INDIA Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 2% 3% 2% Mobile ARPU (INR/month) -4% -4% Q4-8% 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 EBITDA and capex (NOK m) EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items Organic growth

42 MYANMAR Mobile subscribers ( 000) Revenues (NOK m) and EBITDA margin % 7% % 42% 43% 42% Mobile ARPU (MMK/month) 20% EBITDA and capex (NOK m) % EBITDA CAPEX % Organic growth assuming fixed currency, adjusted for acquisitions and disposals. EBITDA margin before other items. Organic growth

43 CHANGES IN REVENUES AND EBITDA Revenues EBITDA Reported Organic Reported Organic Norway -4.4 % -4.4 % -0.7 % -0.7 % Sweden 4.6 % -4.7 % 4.6 % -4.6 % Denmark 0.0 % -8.2 % % % Hungary 1.8 % -5.7 % 0.1 % -7.2 % Montenegro and Serbia 11.6 % 3.1 % 3.7 % -4.3 % Bulgaria 10.7 % 1.4 % 13.1 % 3.7 % Thailand -3.4 % -5.3 % 1.1 % -0.9 % Malaysia % -7.7 % % % Bangladesh 21.0 % 9.5 % 23.6 % 11.8 % Pakistan 17.3 % 8.6 % 10.5 % 2.3 % India 9.9 % 7.0 % nm nm Broadcast 15.3 % 15.3 % 60.3 % 60.3 % Telenor Group 5.0 % 1.5 % 8.2 % 5.0 % 43 Organic growth YoY in fixed currency and adjusted for acquisitions and disposals. EBITDA before other items.

44 DEBT MATURITY AND NET DEBT Debt maturity profile (NOK bn) Subsidiaries Telenor ASA > Net debt in partly owned subsidiaries (NOK m) (NOK m) Q Q Q Digi dtac Grameenphone Per 31 Mar Excl. licence commitments of NOK 3.6 bn Net debt in partly owned subsidiaries is shown on 100% figures